Correlation Between Applied Finance and James Balanced:

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Can any of the company-specific risk be diversified away by investing in both Applied Finance and James Balanced: at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Applied Finance and James Balanced: into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Finance Core and James Balanced Golden, you can compare the effects of market volatilities on Applied Finance and James Balanced: and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Applied Finance with a short position of James Balanced:. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Finance and James Balanced:.

Diversification Opportunities for Applied Finance and James Balanced:

0.87
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Applied and James is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Applied Finance Core and James Balanced Golden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on James Balanced Golden and Applied Finance is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Applied Finance Core are associated (or correlated) with James Balanced:. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of James Balanced Golden has no effect on the direction of Applied Finance i.e., Applied Finance and James Balanced: go up and down completely randomly.

Pair Corralation between Applied Finance and James Balanced:

Assuming the 90 days horizon Applied Finance Core is expected to generate 1.28 times more return on investment than James Balanced:. However, Applied Finance is 1.28 times more volatile than James Balanced Golden. It trades about 0.29 of its potential returns per unit of risk. James Balanced Golden is currently generating about 0.11 per unit of risk. If you would invest  1,140  in Applied Finance Core on October 23, 2024 and sell it today you would earn a total of  38.00  from holding Applied Finance Core or generate 3.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Applied Finance Core  vs.  James Balanced Golden

 Performance 
       Timeline  
Applied Finance Core 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Applied Finance Core has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Applied Finance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
James Balanced Golden 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days James Balanced Golden has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, James Balanced: is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Applied Finance and James Balanced: Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Applied Finance and James Balanced:

The main advantage of trading using opposite Applied Finance and James Balanced: positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Finance position performs unexpectedly, James Balanced: can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in James Balanced: will offset losses from the drop in James Balanced:'s long position.
The idea behind Applied Finance Core and James Balanced Golden pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Check out your portfolio center.
Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

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